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Full text of "War-time financial problems"

254         MEETING  THE  WAR BILL

being noticed, and so is particularly dear to the adroit
politician. By it nobody transfers buying power to
the Government, but the Government and the
bankers, \yho are generally most reluctant accessories
to the transaction, between them create new buying
power, which, coming into a restricted market for
goods in addition to all the existing buying power,
simply forces everybody to consume less because the
money in their pockets fetches less goods owing to
the rise in prices.

The evil attached to this system is obvious
enough. It amounts to a tax on the general con-
sumer in proportion to his consumption, and so it
lays the sacrifice on the shoulders of those least able
to bear it. No Government would have the courage
to impose such a tax openly and frankly. All the
warring Governments in varying degrees have used
this roundabout device of imposing it, very likely
being quite unaware of the fraud on the consumer
that they were perpetrating. Our own Government,
in fact, having first added by this process to a rise
in the price of bread, then reduced it by a special
subsidy—a pleasant touch of Alice in Wonderland
finance. This mode of taxing by raising prices hits,
of course, all those who live on fixed incomes and
salaries and wages. Those who can strike, or take
more out of the consumer, can evade it, and so it
falls on the weakest shoulders and incidentally pro-
duces friction, discontent and dangerous suspicion.
But even it works at the time when it happens.
Each creation of new buying power gives the Govern-
ment, for the moment, control of so much in goods